Of the many automotive trends guiding us toward 2020, four key issues stand out. Each one requires an urgent and proactive response from any player intent on securing a successful future in this intensely competitive market:
1. Rise of alternative power trains
Start-up companies and Asian players are currently leading on electric vehicles, such as BYD (China), which was first to launch plug-in hybrid (2008) and full electric (2009). US and European players are also investing heavily in this technology. However, continuing challenges in battery technology and uncertainties over the viability of fuel-cell and hydrogen powered cars make it difficult to anticipate which technology or mix of technologies will prevail in the future. The general consensus seems to be that alternative power trains will make up over 40% of total car sales in 2020.
2. Emergence of the Ultra Low Cost Car
Tata got the ball rolling with the introduction of the Nano and is sure to be followed by other emerging market players putting pressure on the small car segments dominated by more established players. The overall market share of emerging market players is sure to increase significantly.
3. Continuing overcapacity in the US, Europe and Japan
Continued overcapacity in established markets can only be addressed by increasing exports from these markets or carrying out significant capacity reduction. Germany and Japan, as traditional export led economies, will likely come out of the current automotive crisis through their ability to innovate. However, regionally focused automakers will suffer more and come under increasing competition from new entrants forcing the need to cut capacity.
4. Further increase in the number of car models, segment proliferation and customer behavior change
Customer segment complexity will only increase with customer behavior becoming even more difficult to predict and market to. The trend towards more and more niche products and the move away from the traditional sedan will continue, which will benefit strong brand led companies that excel at innovation. The power to command a premium in transaction price through careful brand management, sophisticated demand management and customer needs fulfillment will be the only way to fight off new entrants pushing up from the low cost segments into the muddled middle.
How can Lansdowne Consulting help?
Lansdowne’s senior team has a solid track record of designing and implementing successful solutions for the world’s leading automotive companies. Lansdowne is a preferred partner for many leading global automotive firms because we have a deep understanding of the industry’s fundamental business and financial issues as well as profound customer insight. In these challenging times, Lansdowne offers the highest level of automotive industry expertise and world-class capability to add value to your organisation.
Lansdowne Consulting provides consulting services to the following automotive entities:
• Automotive OEMs
• Automotive Suppliers
• Off Highway/Truck/Construction Equipment OEMs
• Captive Finance Companies
• Dealerships and Distribution Companies
• Automotive Services Firms
Lansdowne Consulting offers the following services to the Automotive Industry:
Strategy and Operations
• Corporate finance
• M&A transaction support
• Corporate strategy development
• Organization design
• Customer value analysis
• Manufacturing strategy
• CRM, IT & marketing strategy
• Acquisition integration/ post merger integrations
• Supply chain integration
• Lean manufacturing
Sales and Distribution
• Dealer management
• Dealer technical systems
• Strategic retail systems
• Operations improvement
Parts and Aftersales Service
• Parts sourcing
• Retail parts replenishment
• Warehouse demand planning
• Network strategy
• Supplier integration
Customer Relationship Management
• Strategy and process redesign
• Call centers
• Customer data warehouse
• Relationship marketing
Collaboration
• Product strategy
• PDM & configuration management
• Product design and development processes & technologies (B2B)
• Collaborative Product Commerce (CPC)